Music industry revenue in 2013 stayed flat at $7 billion, RIAA says

The Recording Industry Assn. of America's just-released report on music industry revenue for 2013 shows sales held steady at about $7 billion.

The Recording Industry Assn. of America's just-released report on music industry revenue for 2013 shows sales held steady at about $7 billion. (Recording Industry Assn. of America)

Randy Lewis

The good news for the music industry out of the Recording Industry Assn. of America’s just released report on sales and revenue for 2013? Things didn’t get any worse than they were during the previous three years.

Overall revenue during 2013 in the U.S. was $7 billion, nearly the same as it has been since 2009 — showing a comforting stability after the free fall in the first decade of the new millennium, when revenue plummeted from its peak of $14.6 billion in 1999, before Napster and later iTunes changed the game forever.

Anyone looking for the silver lining in the flat revenue figures can find it in the continued uptick in consumer attraction to music streaming services. Since 2007, the portion of revenue generated by streaming services has jumped from just 3% to 21% in 2013.

“Paid subscription services grew the fastest of the digital formats, up 57% to $628 million in 2013,” the RIAA’s report notes. “Growth came not just in dollars, but in the number of subscribers as well, with the annual average totaling over 6 million subscriptions….

“Overall, 2013 sales results show the continuing emergence of streaming music models as meaningful contributors to industry revenues,” the report says. “As recently as 2009, 95% of U.S. music industry revenues came from traditional purchasing (with the majority in physical formats). In 2013, 21% of revenues came from streaming models, where fans can listen to vast libraries of music either for free or as part of a subscription, and nearly ¿ of total revenues came from digitally distributed formats.

“All of this shows the music industry today has grown into a diverse digital business teeming with a wide variety of innovative services catering to all types of music fans,” the report states.

Nevertheless, the effect of a shift from paid downloads to streaming is seen in a 1% drop in revenue from permanent digital downloads, which fell to $2.8 billion last year.

Digital downloads accounted for 40% of U.S. music revenue last year, with physical sales coming in second at 35%, subscription and streaming services at 21% and money from synchronization and ring tones and ring backs collectively adding the remaining 4%.

The number of digital albums sold increased slightly, up 1.1% to 118 million units, compared to 116.7 million in 2012, and revenue from those albums was up 2.4%, to $1.2 billion last year.

But that was offset by a drop in the sales of digital tracks, which sank 4.5% to 1.3 billion and in terms of revenue, dipped 3.4% to $1.6 billion.

“Shipments in physical formats continued to decline in 2013, overall down 12% in value from $2.8 billion in 2012 to $2.4 billion in 2013,” the report notes, which is available in full at RIAA's website.